Microsoft Stock (MSFT) Seen Delivering Strong Total Returns, Analyst Notes

Core Insights - Microsoft Corporation (NASDAQ:MSFT) is recognized as a prominent AI stock, with Morgan Stanley reiterating its "Overweight" rating, citing the stock's attractiveness [1] - The company has increased its quarterly dividend by 10% to $0.91 per share, raising the annualized dividend to $3.64 and the yield from 0.6% to 0.7% [1][3] - The dividend increase aligns with Microsoft's historical average of approximately 10% over the past five years, reflecting a consistent track record of annual increases between 8% and 11% [3] Financial Performance - Morgan Stanley highlighted a strong total return profile for Microsoft, projecting durable strong teens+ total returns supported by expected earnings per share (EPS) growth [2][3] - Microsoft has over $55 billion remaining in share repurchase authorization, indicating ongoing buyback activity [4] - As of June 30, 2025, Microsoft held more than $90 billion in cash and short-term investments, with an anticipated generation of over $70 billion in free cash flow for fiscal 2026 [4] Business Focus - Microsoft provides AI-powered cloud, productivity, and business solutions, emphasizing efficiency, security, and advancements in AI [5]